Haystack: Rubiso v. Rivera (GR L-11407, 30 October 1917)

Rubiso v. Rivera
[G.R. No. L-11407. October 30, 1917.]
First Division, Torres (J): 5 concur, 1 took no part

Facts: Bonifacio Gelito sold his share in the pilot boat Valentina, consisting of 2/3 interest therein, to the Chinaman Sy Qui, the co-owner of the other 1/3 interest in said vessel; wherefore this vendor is no longer entitled to exercise any action whatever in respect to the boat in question. Gelito was one of the partnership owners of the Valentina, as in fact his name appears in the certificate of protection issued by the Bureau of Customs, and the rights he held are evidenced by the articles of partnership; but, the whole ownership in the vessel having been consolidated in behalf of the Chinaman Sy Qui, this latter, in the use of his right as the sole owner of the Valentina, sold this boat to Florentino E. Rivera for P2,500, on 4 January 1915, which facts are set forth in a deed ratified on the same date before a notary. This document was registered in the Bureau of Customs on 17 March 1915.

After the sale of the boat to the defendant Rivera, suit having been brought in the justice of the peace court against the Chinaman Sy Qui to enforce payment of a certain sum of money, the latter's creditor Fausto Rubiso. Rubiso later acquired said vessel at a public auction sale and for the sum of P55.45. The certificate of sale and adjudication of the boat in question was issued by the sheriff on behalf of Fausto Rubiso, in the office of the Collector of Customs, on 27 January 1915 and was also entered in the commercial registry on 14 March 1915.

On 10 April 1915, the plaintiffs brought suit in the CFI and alleged in the complaint that his clients were the owners of the pilot boat named Valentina, which had been in bad condition since 1914 and was stranded in Tingloy, Bauan, Batangas; and that Florentino E. Rivera took charge or possession of said vessel without the knowledge or consent of the plaintiffs and refused to deliver it to them, under claim that he was the owner thereof. After the hearing of the case and the introduction of documentary evidence, the judgment of 6 September 1915, was rendered, , in which the defendant and appellant was ordered to place at the disposal of the Fausto Rubiso the pilot boat in litigation. No special finding was made for costs. The defendant appealed and moved for a new trial. This motion was denied and appellant excepted.

The Supreme Court affirmed the judgment, with the costs against the appellant.

1. Inscription in registry is necessary and indispensable
Article 573 of the Code of Commerce provides in its first paragraph that merchant vessels constitute property which may be acquired an transferred by any of the means recognized by law. The acquisition of a vessel must be included in a written instrument, which shall not produce any effect with regard to third persons if not recorded in the commercial registry. With the enactment of Act 1900 on 18 May 1909, said article was amended and appears as Section 2 of that Act; amending solely in charging the Insular Collector of Customs with the fulfillment of the duties of the commercial register concerning the registering of vessels. In both laws, Inscription in the commercial registry is necessary and indispensable in order that the purchaser's rights may be maintained against a claim filed by a third person. The legal rule set down in the Mercantile Code subsists, inasmuch as the amendment solely refers to the official who shall make the entry; but, with respect to the rights of two purchases, whichever of them first registered his acquisition of the vessel in the one entitled to enjoy the protection of the law.

2. Even if public auction is subsequent to private purchase, right of first to register is primary
Florentino E. Rivera's rights cannot prevail over those acquired by Fausto Rubiso in the ownership of the pilot boat Valentina, inasmuch as, though the latter's acquisition of the vessel at public auction, on 23 January 1915, was subsequent to its purchase by Rivera, nevertheless the sale at public auction was antecedently record in the office of the Collector of Customs, on January 27, and entered in the commercial registry (an unnecessary proceeding) on March 4; while the private and voluntary purchase made by Rivera on a prior date was not recorded in the office of the Collector of Customs until 17 March 1915. Rubiso, who was careful to record his acquisition, opportunely and on prior date, has, according to the law, a better right than the defendant Rivera who subsequently recorded his purchase. The latter is a third person, who was directly affected by the registration which the plaintiff made of the acquisition.

3. Effects of registration to liabilities of a vessel
When the absolute owner of the purchased boat, declaring the latter to be free of all encumbrance and all claims by strangers for, pursuant to article 582 of the Mercantile Code, after the bill of the judicial sale at auction has been executed and recorded in the commercial registry, all the other liabilities of the vessel in favor of the creditors shall be considered canceled.

4. Ships or vessels are of the nature and condition of real property; Article 573 of Code of Commerce vis-à-vis Article 1473 of the Civil Code
Ships or vessels, whether moved by steam or by sail, partake, to a certain extent, of the nature and conditions of real property, on account of their value and importance in the world commerce; and for this reason the provisions of article 573 of the Code of Commerce are nearly identical with article 1473 of the Civil Code.

5. No indemnity for losses and damages
Aside from the fact that, subsequent to the date when the judgment appealed from was rendered, the vessel in question emerged unharmed from the place where it was stranded, and was, at the time of the trial, anchored in the port of Maricaban, the record certainly does not furnish any positive evidence of the losses and damages alleged to have been occasioned. On the other hand, it cannot be affirmed that the defendant acted in bad faith specifically because he acquired the vessel on a date prior to that of its acquisition at public auction by the plaintiff Rubiso, who, for the reasons aforestated, is true and sole owner of said pilot boat.

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